Note: The increase in limit to 1. 5Crs. is yet to be notified by the govt.

History:

From 1st Jul’17-to 13th Oct’17, the limit was Rs.75 Lakhs & 50 Lakhs, in place of Rs. 1Cr and 0.75Cr respectively. {8/2017_CT_27.Jun.17}

Proposed changes:

It was suggested by GST council, to increase the threshold limit up to Rs. 1.5 Crs, suitable changes were also made in the act. However, the change is yet to be notified. It may get notified w.e.f. 01.Apr.19.

4. Whether the exempted income to be considered for the aggregate turnover for GST Composition scheme?

Yes. In simple terms, Aggregate t/o means total value of all the businesses of a person with same PAN.

It is clarified that the value of supply of exempt services by way of extending deposits, loans or advances in so far as the consideration is represented by way of interest or discount, shall not be considered. {ROD 1/2017_CT_13.Oct.17 & ROD 1/2019_CT_01.Feb.2019}

For agents, the aggregate turnover includes the value of supplies made on behalf of their principals

For job workers, value of finished goods supplied from the place of Job worker, shall be included in the turnover of Principal.

Eg 1: If a person is having 90L income from supply of Goods and 11L from exempted services (1L from Interest and 10L from providing education) such person shall not be eligible for composition scheme.

Eg 2: For the same person, if the entire 11L is from Interest income, such person shall be eligible for composition scheme.

5. Who are the persons not eligible to opt for GST Composition scheme?

Following persons are not eligible to opt for the composition scheme:

A casual taxable person or a non- resident taxable person;

Supplier who has stock of goods

Purchased from URD and no tax under RCM paid

Imported

Purchased for received from different states

Note: There is no restriction on procuring good from inter-state suppliers, after opting this scheme

Supplier of services, other than restaurant service and Exempted services (extending loans, deposits..etc) referred above;

Note: W.e.f. 01.Feb.19, the suppliers shall be allowed to supply services to the extent of 10% of the turnover or Rs. 5Lakkhs, whichever is higher.

Persons supplying goods

which are not taxable under GST law;

to different states

Persons suppliers making any supply of goods through an electronic commerce operator who is required to collect tax at source under section 52; and

Should file the return in Form GSTR-9A shall be filed for the financial year

The same shall be filed by 31st December, following the end of the financial year.

11. What are the other compliances required?

Apart from filing the returns, following are the few compliance requirements:

Returns & payment

Return in Form GSTR-04 should be filed on quarterly basis

Tax also should be paid along with the return

18th of the month following the end of the quarter shall be the due date for return

“Bill of Supply” should be issued for supply of goods

No tax shall be collected from the recipients

Mention the words ―”composition taxable person, not eligible to collect tax on supplies‖ at the top of the bill of supply”

Mention the words ―”composition taxable person‖ on every notice or signboard displayed at a prominent place”

Should not make any inter-state supplies

Proposed changes:

It was suggested by GST council, to make

The payment of taxes on quarterly basis and

Filing of returns on annual basis,

However, the same are yet to be notified. It may get notified w.e.f. 01.Apr.19.

12. Effective dates for shifting from Composition to Regular or vice a versa.

The option of changing from regular scheme to composition scheme can be excercised on financial year basis only.

The option for changing composition scheme to Regular scheme can be done at any point of time during the financial year.

13. What if any of the conditions are violated?

The registered person shall become the regular person from the date on which such conditions are violated.

Eg:

The turnover exceded 1Cr / 75Lakhs

Supplier engaged in Inter-state supplies

The service portion exceed 10% of the turnover and also Rs. 5Lakhs..etc/.

14. What are the implications of changes from Regular to Composition scheme and Vice a Versa. ?

The taxable person may have to file different types of intimations, avail / reverse the credit on closing balances..etc. The same shall be discussed in the next article “Implications of changes from Regular to Composition scheme and Vice a Versa”.

15. Summary of proposed changes

Below are the changes suggested by the council in it’s 32nd meeting:

Turnover for Supplier of Goods:

Increase the threshold limit up to 1.5 Crs, suitable changes were also made in the act

Service providers:

To extend the composition scheme to service providers

Keeping the turnover limit as up to Rs. 50 Lakhs,

The tax rate as 6%

Returns for composition scheme:

It was suggested by GST council, to make

The payment of taxes on quarterly basis and

Filing of returns on annual basis,

However, the same are yet to be notified.

16. What is the effective date for proposed changes?

As per the press release, the proposed changes would get notified with effect from 01.Apr.19

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Post qualification, for the first 2 years (2015 & 2016), I worked for Infosys, Globally reputed Indian Software Company and for the next 2 years (2017 & 2018) in Hiregange & Associates (H&A), the firm known for it’s expeView Full Profile